Goal IX Newsletter

Winter 2001, Volume 7, Number 1

Minority Owned Law Firms: Where Are They Now? by: Hope Viner Samborn

In the past few years, many major minority law firms have moved into majority-owned firms or corporations. Yet, some have not moved, and their very existence proclaims that minority law firms are alive and thriving.

“The stories of our demise are greatly exaggerated,” quips Martin Greene, of Green and Letts, a Chicago-based firm. “It is too easy for people to think that we are near-extinct. It is a self-fulfilling prophecy.”

Prior to the 1980s, a large percentage of minority lawyers started their own solo or small firms. Oftentimes, they were based in minority communities and functioned much like “[mom]-and-pop” operations. Minority lawyers before the booming ’80s generally did not find sufficient opportunities within majority-owned law firms and corporations. Besides government employment, opening their own small firms provided the best option for practicing law.

In the 1980s, there was a marked increase in the creation of minority-owned law firms. The reasons for that growth and the purpose in continuing the operation of these firms are as diverse as the partners who run them. Like their counterparts from earlier decades, some minority law firm owners sought opportunities that were not available in majority-owned firms. Others wanted a more welcoming practice environment, and some saw and continue to see minority firms as a place to be nurtured and to mentor younger lawyers.

Perseverance Tips

The keys to success for minority-owned law firms are not that different from that of other small or medium sized firms. Here are some tips from some successful minority practitioners.

• Find a niche practice area and develop your expertise. Don’t try to be everything to everyone.• Be knowledgeable and do competent, efficient work.• Establish your practice and develop a reputation for high-quality work.• Have a diverse mix of clients rather than a single client.• Develop clients in the private sector.• Create business for yourself by keeping your name before clients.• Take advantage of opportunities to meet potential clients and market your skills and services.• Participate in seminars.• Be active in bar associations and other legal organizations.

“Many saw minority-owned firms as a means to offer a different viewpoint to corporate clients, with the hope that they would create large full-service law firms that could compete with similar majority-owned firms,” says David B. Wilkins, Harvard Law School professor, who is currently writing a book about the black corporate bar. Although many minority-owned firms have successfully created niches and established strong reputations for high-quality service, none has achieved that large national presence. “Those that tried have run into tough times in the past five years,” Wilkins says. In fact, many minority-owned firms have closed their doors in recent years. But the reasons for the shutdowns vary, ranging from economic struggles to better opportunities elsewhere.

Despite the demise of a number of minority-owned law firms, many in the legal profession believe that such firms need to thrive to provide a diverse viewpoint for those seeking legal services. Corporations “need to continue and redouble their efforts to have diversity in their services, including the law,” says Green. “There is an advantage to having a different viewpoint, particularly in litigation.” He adds that minority lawyers often understand a plaintiff or plaintiff’s counsel or jury in a different way from non-minority lawyers.

But others in the profession contend that minority lawyers in majority-owned law firms can provide that diverse view of a legal problem. Otis McGee, Jr., left a minority law firm three years ago to pursue opportunities for consistently challenging legal work within a 325-lawyer majority-owned firm—Sheppard, Mullin, Richter & Hampton, LLP, in San Francisco. He had handled complex matters as a partner in his minority law firm, but he wanted more high-level professional work. He selected a large majority-owned law firm where he could tackle high-exposure class action and other complex litigation with adequate staff and support—something not available at his small minority firm.

“I don’t know that in my lifetime some of these types of opportunities that are presenting themselves would have been before us,” says McGee.

“There were opportunities for our firm to merge with or join other firms in the San Francisco area,” says McGee of his minority firm. “We chose not to because we wanted to see if we could succeed on our own as a minority firm,” he explains, adding, “there was no way we could do so.”

“We cut our teeth doing work for several of the automobile manufacturers,” says McGee. That work eventually became challenging product liability work, but “the fee structure wasn’t profitable for us,” he adds. In addition, corporations often would try out a minority law firm by asking its lawyers to handle routine cases that were not challenging.

Competition from silk-stocking firms also posed problems for McGee’s firm. “We continually bucked up against the old boy network. We continually had to prove that we could do it and that we could do it in a fashion that was competitive,” he remarks. That meant, “If [we] can’t offer a better product . . . then we better come up with something else that gives us a competitive edge,” he explains. “That usually resulted in lowering our fees, making the work far less profitable.” Now, from his position in a majority-owned law firm, McGee believes that he can provide both excellent legal services and a diverse viewpoint.

“Large majority law firms once were content to allow small enterprises, such as minority-owned law firms, to have smaller pieces of business. But today, the majority firms want that business and want to raid key talent from minority- owned firms,” says Wilkins. Many minority-owned law firms were “too big to be small and too small to be big,” to make it in the marketplace, he says, causing those firms to shrink rather than grow.

Many minority-firm lawyers say their firms struggle not because of their minority composition but because of their small size. “I do not believe that minority firms have had a higher rate of partnership dissolution than small firms owned by white attorneys,” says Carol Rogers, executive director of the California Council on Minorities Program. “Every small firm faces economic and business development challenges from time to time,” she adds.

McGee’s partners closed their doors a short time after he left. But, as is often the case with minority law firms that disband, some of his partners opened other now-thriving practices. “Law firms are a little bit like energy, they may reconfigure, but they never die,” says Wilkins. Often, majority-owned firms seek the lawyers from minority-owned firms. “When people decide to go to majority firms, they only go to those firms because those firms see them as having something of value—usually a book of business,” says Greene.

The key to building and keeping a successful minority-owned practice is similar to that for other small law firms: find a niche and cultivate clients. McGee, for instance, makes a point to attend meetings of the ABA’s Minority Counsel Program and the California Minority Counsel Program, which provide valuable networking opportunities. He also regularly attends other bar association programs, like the ABA National Conference for the Minority Lawyer and the Commission on Racial and Ethnic Diversity in the Profession Retention Summit, where he knows he will meet and interact with a variety of other lawyers.

“The way to succeed whether you are a minority firm or a majority firm is in the private sector,” says Manny Sanchez of Sanchez & Daniels, a successful Chicago-based minority law firm that specializes in employment law, civil litigation defense, and public finance. “If you can’t develop a book of business in the private sector that will develop a significant practice, you will not develop your law firm.”

“Too often, the minority-owned law firms that have failed have not succeeded in growing their private sector book of business,” says Sanchez. “They were too dependent on public sector business set-asides, affirmative action, and business of that sort. That is nice to have it, but it is not going to make you.”

Innovative small minority law firms have carved out niches that go beyond special programs that once flourished. These firms have found the secret to building a growing, booming business.

“The key to success is no different from any other small law firm business— doing quality work and maintaining good client contact; operating efficiently; managing costs and expenses; and establishing a niche and getting your reputation in that niche,” says Langdon D. Neal of Earl L. Neal & Associates, LLC, in Chicago. Neal’s firm, started by his father in 1938 because of a lack of opportunities for African American lawyers, has grown and become successful. But he acknowledges small firms, including minority-owned firms, are struggling in today’s economic climate.

Small firms cannot offer the same services as large firms because they lack staff, admits Neal. “We don’t have all of the services. It is pretty hard to compete against the big law firms who are entrenched with corporations who have a large number of lawyers—all making themselves available to serve corporations,” says Neal.

Another factor that benefits large, majority-owned firms has to do with the legal profession’s current focus on enhancing diversity. In decades past, corporate legal customers who had an interest in diversity would probably seek out minority-owned law firms as potential service providers. In today’s business climate, however, corporate legal customers can fulfill their diversity needs by requiring their majority-owned law firms to have diverse legal staff. This was clearly exemplified with the “Diversity in the Workplace Statement of Principle” that BellSouth initiated in 1998. In general, it states that law firms that represent the company must “work actively to promote diversity within their workplace.” More than 250 other major corporations have signed on to this diversity statement.

Richard Amador of Sanchez & Amador in Los Angeles agrees that minority-owned firms face certain obstacles in competing with majority-owned firms. But, he also maintains that minority law firms are succeeding in competing with the big guns. “Most minority firms have at least three strikes against us. We are small, we tend to be new firms, and most importantly, we are not white. That being said, it is possible for quality minority firms to get corporate business, but only if someone in the corporation is open-minded enough to look at us seriously, and is in an environment that permits them to do so.”

Harry Gee, Jr., of Harry Gee, Jr., and Associates, a Houston immigration law firm, agrees that he doesn’t fit within the good old boys network. “Our circles don’t cross or intersect as much.” But he also has succeeded in establishing himself in the corporate world. A significant part of his success stems from perfecting his practice in his selected niche, immigration law. When he started his practice in the 1980s, immigration law aligned with the needs of his community, but it was not a hot practice area. By the mid-1990s, with the growth of the global economy, immigration law became a popular practice niche. As many new practitioners flocked to immigration, Gee already had an established immigration practice. “We have been fortunate in that regard; part of it is dumb luck, being the first kid on the block,” Gee states. “We have a niche or boutique practice; that is why we get referrals,” he adds.

Minority law firms must consistently market themselves and create opportunities by establishing their reputation as outstanding lawyers by keeping their name out in consumer circles, say McGee and others. “They need to take advantage of every opportunity to press the flesh or otherwise market those services and skills,” he explains.

Networking and marketing efforts are especially essential because minority law firms often lack the same opportunities as majority firms. “We don’t have the same relationships—whether they are social, professional, or family relationships— in which we can foster business,” says Neal. “That is a hard hurdle to overcome.”

The future is expected to be a mixed bag for minority-owned law firms. The federal minority business development programs that benefited many minority lawyers, such as the Neal firm in the early ’80s and beyond, may be gone with the new administration. “Government has been a tremendous source of opportunity for minority law firms,” says Neal. “It has been the single most important opportunity” for a number of minority law firms, including Neal’s real estate, municipal law, and land use and development firm.

“With Bush, there will be a renewed assault on private affirmative action,” says Wilkins. But for firms such as Greene and Letts, the future looks bright. “We are looking for much greater opportunities,” says Greene. And they are hoping to grow apart from any larger entities. “We are trying to make this an institution,” says Eileen Letts, a partner in Greene and Letts.

Some minority lawyers contend that as more people of color are becoming the decision makers in major corporations, more opportunities will exist for minority lawyers and law firms. Others say the baby boomer generation is more enlightened. “It is the baby boomer generation that recognizes the value of diversity from a business standpoint,” says Sanchez. They understand that vendors, including law firms, should be more diverse, he adds.

And others, such as McGee, caution minority lawyers about expecting work from minority decision makers at corporations rather than continuing major marketing efforts. “I didn’t think that all I had to do was have minorities who are in positions of influence,” says McGee. Many of these decision makers have significant pressure placed on them to succeed. “There is a perceived pressure that they can’t take risks,” says McGee. “They need to be comforted that there is no risk in spreading the wealth among minority attorneys.” That America, but also many seek to mentor young minority lawyers. “We need people they can talk to and evolve,” says Greene.

Minority law firms “have an obligation to empower their community,” says Dale Minami, of Minami, Lew & Tamaki, LLP, in San Francisco. “Successful ones are those that can balance the need to survive by making money and the need to do progressive legal work and feed your soul by fighting discrimination and mentoring young attorneys.”

Today, many of these reasons still are valid. Some lawyers, however, who have left minority-owned firms for majority firms expect that the opportunities at a majority-owned firm can be greater than or as good as at a minority-owned operation. These lawyers of color also believe that they can offer a different perspective from within a majority-owned firm.

Hope Viner Samborn is a Chicago freelance writer who often contributes to the ABA Journal